Forex crisis: Losses recorded not affecting our tax payments – MTN

The Chief Financial Officer of MTN Nigeria, Mr. Modupe Kadri, says despite the telecom giant’s losses in 2023 due to the devaluation of the Naira, it has remained faithful to its tax obligation to Nigeria.

In its financial statement for Full Year 2023, MTN Nigeria reported a N2.47 trillion revenue, representing a 22.7 per cent growth in revenue. However, with an accrued net foreign exchange loss of N740.4 billion, the group recorded a pre-tax loss of N177.9 billion.

This loss led to a wipe out of the group’s shareholders’ funds as its accumulated loss now stands at N208 billion. As expected, the loss has impacted MTN’s ability to pay final dividends for 2023.

Kadri emphasized that despite the substantial forex losses incurred in FY 2023, approximately 83 per cent of that amount remained unrealized, adding that the losses were not in cash and suggested that if the Naira were to regain its value, there could be a reversal of these losses.

He highlighted that Nigeria’s tax system doesn’t recognize unrealized losses hence the group has to account for income taxes and VAT, which is a further addition to the group’s cost profile.

“Over the years, MTN has remained tax-compliant, it was listed as one of the top 20 tax-compliant organizations… However, the government should be more interested in how much industries would make to remain profitable so they can get their taxes.”

“Even though our cost profile has gone up, it’s not affecting the VAT to the government, it’s just additional cost to us.”

Kadri highlighted the new 7.5 per cent VAT on tower leases which was contained in the Finance Act 2023, noting that this is “an additional 7.5 per cent cost which we have to carry, and we can’t pass on to end-customers.”